Sunday, 14 February 2016

A new report
commissioned by the Greens in the European Parliament has revealed that
furniture multinational IKEA has dodged €1 billion in taxes over the last 6
years using onshore European tax havens.
IKEA is using a series of tax loopholes in different European countries, namely
the Netherlands, Belgium and Luxembourg, to avoid paying taxes. Molly Scott
Cato MEP, a member of the European Parliament’s special committee on tax, said:

Just like its flat-pack furniture, assembling
a tax dodge is simple if you know the right tricks. And it’s easy to tuck away
out of site where tax administrations will barely notice it. This report
deconstructs the massive scale of IKEA’s tax avoidance practices.

Ikea Bremt Park

This is a company which is held in some
affection by British people, so what is revealed will come as a shock to many
and risks damaging IKEA’s reputation with UK customers. It is time that
corporations such as IKEA realised that being an ethical company goes beyond
checking the credentials of suppliers and treating your staff well. Complex tax
avoidance schemes are unethical and British people expect companies to pay a
fair share of tax to fund the services they rely on.

Scott Cato has joined other Green MEPs
in signing a
letter to the EU competition commissioner, Margrethe Vestager, and tax
commissioner, Pierre Moscovici, presenting the report as evidence and urging
the Commission to carry out a further investigation to verify possible
infringement of EU law. Molly said:

This cynical ‘tax hopping’ is reprehensible
and we want the European Commission to fully investigate if and how it
infringes on EU law, and take action to address this. EU finance ministers, for
their part, should work immediately on trying to recoup the tax revenues, which
have been denied to them.

Greens also say that a Corporate
Tax Package published by the European Commission at the end of January will
not go far enough in preventing IKEA using its different tax loopholes. Molly
concluded:

There is an urgent need to change the
regulatory framework which facilitates corporate tax avoidance in Europe. We
badly need public country-by-country reporting rules for all sectors to provide
transparency and ensure the tax strategies of corporations can be properly
scrutinised.

We also need a minimum corporate tax rate to end the race to the
bottom of tax dumping in Europe. Such measures require the active cooperation
of EU governments and most have so far shown no enthusiasm for truly tackling
corporate tax avoidance.

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